The marginal rate of technical substitution in production is analogous to the marginal rate of substitution for the consumer's optimization problem in that the slope of the consumer's indifference curve is the opposite of the ratios of the marginal utilities of the two goods, whereas the slope of the production isoquant is the opposite of the ratio of the marginal product of labor relative to the marginal product of capital.

Question

Quizplus · Accepted Answer

The statement accurately describes the relationship between the two concepts. The statement accurately describes the relationship between the marginal rate of technical substitution and the marginal rate of substitution for the consumer's optimization problem.

The Marginal Rate of Technical Substitution in Production Is Analogous